A distinguishing feature of early diabetic retinal vascular changes is the selective degeneration of pericytes (mural cells) from the retinal capillary vessels. Loss of these pericytes has been proposed to be associated with decreased capillary tonicity, the formation of microaneurysms, and vessel dilation. The role of aldose reductase in the progression of diabetic retinopathy has been investigated in age- and sex-matched beagles fed a 30% galactose diet with or without the aldose reductase inhibitors sorbinil or M79175. Eyes were periodically enucleated from dogs in each group and their retinal capillaries were examined as trypsin-digested flat preparations. Before the clinical appearance of retinal changes, pericyte ghost formation was observed in the eyes of three fourths of the dogs after 21 months and all of the dogs after 24 months of galactose feeding. Many of the capillaries containing pericyte ghosts demonstrated an apparent proliferation of endothelial cells and acellular vessels. No pericyte ghosts or abnormal findings were observed in retinas from either normal control (zero of nine) or galactose-fed dogs treated with aldose reductase inhibitors (zero of 16). These findings indicate that aldose reductase inhibitors can prevent the formation of pericyte ghosts and other subsequent capillary changes in experimental retinopathy.